Monday, August 8, 2016
In business, higher education, politics, everyday life, I have a theory. One third of people are right on, one third have some idea what is going on, and one third just don’t get it.
Entrepreneurs, managers, parents, teachers, and-at some point-everyone have to explain goals and intentions to another person in order to enlist help in achieving them. Too often, those brilliant explanations fall on seemingly deaf ears. They just don't get it!
The dangerous ones are those who think they get it but do not. Watch out for them.
We (the human species) worked out a long time ago how best to get by in the world. And the theory is tantalizingly simple. It's the practice that's a bitch.
We can quibble over who really said what (and when), but all the major religions and schools of ethical thought (and many of the minor ones) have come to a similar conclusion about the best way to live. Unfortunately, most of them didn't stop at the Golden Rule, but instead tacked on a lot of other junk about diet, fashion, and hygiene; because, let's face it, it's so much easier to dress correctly than it is to be empathetic to another human being.
There are some who have suggested that the propensity to think of others helped to spur human evolution. And there's certainly a case to be made that those who practice kindness were more likely to survive (and thus pass on that trait). It's an interesting hypothesis, but it seems a bit of a stretch to me, since we are one of the few species who kill and abuse our own kind. Animals (at least within their own species) don't really seem to have a need for the golden rule. In any case, humans probably did recognize early on that constant retaliation rarely solved anything in the long run.
Of course, there is certainly room for debate as to whether being "good to others" really is a rational strategy. And in our current geo-political climate, we're not likely to agree anytime soon. But interestingly enough, even game theory suggests that the best way to "get along" is to lead with kindness and then respond in direct proportion to how the other "player" reacts. Of course this strategy can still lead to a spiral of violence, for which game theory suggests that a re-set can be advantageous. That is, try leading with kindness again. You can sometimes catch your opponent off guard.
So how do we deal with the one third who don’t get? Be nice, even when they are jerks, be nice – so beware, you know who you are (I hope), I am going to be very nice to you, deal with it!
IN SEARCH OF BONDS - Money managers are worrying that when they need U.S. Treasury bonds, there won’t be enough at hand. On the surface, the concern might seem unwarranted: the U.S. bond market is the largest in the world and Treasuries are among the most easily traded asset classes. But a buying spree by central banks is reducing the availability of government debt for other buyers and intensifying the bidding wars that break out when investors get jittery, driving prices higher and yields lower. The squeeze could get worse if central banks in Japan and Europe decide as expected to step up their stimulus efforts. Among those feeling the worst pinch are pension funds and life insurance firms in Japan, Europe and the U.S., but even central banks themselves are having trouble finding all the bonds they need.
BIG BREW - The U.S. Justice Department has signed off on Anheuser-Busch InBev’s acquisition of rival SABMiller, removing one of the last major hurdles standing in the way of a roughly $108 billion deal to create a global beer giant. The antitrust enforcers took limited action against AB InBev, putting restrictions on the beer giant’s ability to pursue the fastest-growing part of the U.S. beer market and limiting the Belgian-based brewer from creating incentive programs that encourage independent distributors to sell and promote its beers over rivals. Now AB InBev faces only one more regulatory hurdle—China—and then the deal requires shareholder approval. But SABMiller’s board was expected to discuss the possibility of seeking new terms from AB InBev now that the U.K.’s vote to exit the EU has sent the pound plunging.
TECH'S BIG LOBBYING TAB - Several tech and telecom-related groups were among the top 20 lobbying spenders in 2016's second quarter, reports POLITICO Influence
Here they are:
- Google (No. 9, at $4.24 million)
- AT&T (No. 10, $4.07 million)
- National Association of Broadcasters (No. 11, $3.61 million)
- Comcast (No. 13, $3.38 million)
- National Cable and Telecommunications Association (No. 17, $3.04 million)
- Amazon (No. 18, $3 million)
BIRTHDAYS THIS WEEK – Birthday wishes and thoughts this week to Tony Bennett (90) Manhattan, NY; Kevin Gallagher ...famous football gambler; Wayne Knight (61) Pasadena, CA.; Tom McGuire … famous yachtsman, Donna Redman … always looks good in Pink.
COLLEGE CHRONICLES - NEW RULES FOR ONLINE COLLEGES: The Obama administration on Friday unveiled its long-anticipated proposal aimed at pushing states to beef up their oversight of online college programs. It would effectively require states to have a process for reviewing and taking "appropriate action" on student complaints about online programs that enroll their residents - even if the college isn't physically located in the state.
- The department dropped from earlier drafts the most controversial part: a provision that would have in effect required each state to actively review and regulate each college that enrolled any of its residents in an online course, even if the college is physically located in another state.
- The plan also will accommodate the multi-state reciprocity agreements aimed at making it easier for colleges that operate online programs across multiple states to satisfy the regulatory requirements in various jurisdictions. The largest, the National Council for State Authorization Reciprocity Agreements, which counts 40 states as members, praised the department's proposal:
PRIVATE COLLEGES STRIKE BACK: The Hillary Clinton and Bernie Sanders' camps may be celebrating their unification on a "debt-free" college proposal, but private colleges and universities aren't breaking out the champagne. Some are predicting dire consequences for their sector if Democrats get their way on providing free public college. As Clinton's plan stands now, families making up to $125,000 would be eligible for the free tuition. Patricia McGuire, president of Trinity Washington University, said it puts small institutions like hers "gravely at risk." She added: "We're going to ruin some of the places where low-income students get the best education, and are most likely to be successful."
- Sheila Bair, the president of Washington College in Chestertown, Md., said the free tuition proposal is simply unaffordable, and ultimately just shifts the burden to taxpayers. Bair, a moderate Republican, is a former chairwoman of the FDIC who sounded an early alarm about the nation's subprime lending crisis. If the Democrats' plan does move forward, Bair said the funding should be in the form of grants to an institution of a student's choosing - otherwise it would skew student choice away from the "unique kind of environment" that private schools offer. "I think what would happen is we would have to become more elitist because anybody who is not really wealthy is going to go to take the free option," Bair said. "I don't want us to be elitist. I want us to have a diverse student population.
GOOD READ - "Underwater in the Las Vegas Desert, Years After the Housing Crash," by NYT's Jack Healy: "More than eight years after rotten loans and plunging home values made Las Vegas the center of the housing crisis, thousands of people have yet to recover." http://nyti.ms/2b1VkVn
APPLE EARNINGS FALL - Apple Inc. said its quarterly profit fell 27 percent as the company grappled with the first prolonged slump in iPhone sales since the product was introduced in 2007. Revenue fell for a second straight quarter, along with sales of its flagship smartphone, which is awaiting an expected refresh in September.
While the company reported strong sales of the smaller iPhone SE launched in March, overall its current models have failed to meet the booming sales of its first batch of large-screen iPhones, sapped in part by cooling demand in China and U.S. customers holding on to handsets for longer because of changes in carrier contracts. The results, and Apple's expectations for the current quarter ending September, were better than what Wall Street feared, and the stock rose more than 6 percent in after-hours trading.
PAYING DIVIDENDS - Technology stocks that predate the internet bubble of the late 1990s are hot again, thanks to a feature that many tech firms deliberately avoided in those days: hefty dividends. The sight of big-name technology companies paying large dividends is causing some double takes. Executives and analysts often contended during the technology boom of the 1990s that a company that paid a dividend was implicitly acknowledging limitations on its growth potential. The wave of cash now pouring into older tech stocks reflects investors’ willingness to pay up for investments that provide steady income. Meanwhile, in the slowest year for U.S. IPOs since 2009, we report that the downtrodden IPO market just can’t compete with buyers who are willing to pay big to take potential listings off the board. More companies, from Dollar Shave Club to oil company Centennial, are choosing a sale over a public listing.
HOW MUCH DOES HE MAKE??" -- State worker salary database: Now includes 2015 University of California pay, 2015 CSU pay, 2015 civil service pay, and 2014 state legislative pay. This database allows you to search the salaries of California's 300,000-plus state workers and view up to eight years of their pay history. http://bit.ly/2aDwxpI
REALLY? - Paris Hilton thinks she could be ISIS' next target. Paris Hilton says she worries a lot about traveling the world, especially because she's a 'famous' person who could be a 'clear target of an attack' by terrorists. Oh yes, and did I mention Rink Rats has been nominated for a Pulitzer Prize.
REALLY? PART DEUX – Early last week, Donald Trump picked a prolonged fight with the parents of a dead soldier and said they shouldn't be permitted to criticize him; he called Hillary Clinton "the devil"; said the November election will be "rigged"; he falsely claimed he got a letter from the NFL complaining about the debate schedule; and he said radical Islamic terrorists are coming into the United States "by the thousands and thousands." Trump then told a USA Today op-ed writer that he would urge his daughter to quit a job if she were the subject of workplace harassment.
HARVARD REPUBLICAN CLUB - won't endorse Trump for president: The Harvard Republican Club won't be endorsing Donald Trump, marking the first time in 128 years that the organization has not backed the Republican nominee for president ... The organization said Trump's platform would endanger Americans' security both at home and abroad, and his views are not consistent with conservative principles. It also said Trump's mocking and belittling of various groups and people is both bad politics and 'absurdly cruel.
RIGGED – The Trump Campaign’s full comments because they are so shocking and dangerous: "I think we have widespread voter fraud, but the first thing that Trump needs to do is begin talking about it constantly ... He needs to say for example, today would be a perfect example:
"'I am leading in Florida. The polls all show it. If I lose Florida, we will know that there's voter fraud. If there's voter fraud, this election will be illegitimate, the election of the winner will be illegitimate, we will have a constitutional crisis, widespread civil disobedience, and the government will no longer be the government"
The Trump Campaign is laying the groundwork for Trump to challenge the legitimacy of the 2016 election if he loses and suggesting there could be a "bloodbath." To this writer this seems to come close to the legal definition of fomenting insurrection against the US government. Short of that, all of the talk of a "rigged" election - with no evidence whatsoever and the election still months away - is deeply corrosive to a political system already deeply polarized and under significant strain. The last thing the US needs is for a sizable minority of the population to begin 2017 believing the election was stolen.
Such a scorched earth strategy from Trump would also have major economic repercussions. Washington is already dysfunctional and further damaging a weak economy. Should Clinton win, she would have at least some window to try and pass meaningful economic legislation that could combine badly needed infrastructure and tax reform. That could prove impossible if DC is even more divided than it is now. There is also likely to be a recession at some point in the next president's first term. The Fed will have little room to fight it. Congress and the White House will have to be functional enough to employ all available fiscal tools.
Al Gore recognized the critical importance of peaceful transitions of power in 2000 when the Supreme Court ended the Florida recount and awarded the presidency to George W. Bush. This year is not likely to be that close. But if it is, and Trump loses, the possibility of significant domestic unrest seems real. And that's a scary thought.
MUST SEE VIDEO - "3 a.m.": "Marge and Homer Simpson wrestle with the choice in this election." 2-min. video http://bit.ly/2aMma85
1968 vs. 2016 - On comparisons between George Wallace in '68 and Trump in '16 : Wallace tapped into an angry electorate ... the people in Washington were making stupid decisions that ruined their lives. The more specific complaint in 1968, you had bussing policies, housing policies that Wallace was arguing against, and those were more invasive than anything Donald Trump complains about ... He doesn't have a list of particulars like Wallace did. One overlap is trade ... The rhetoric is very similar, the sense of grievance and obviously the law and order is a direct copy from Wallace. People think it's [Richard] Nixon, but Nixon was trying to keep up with Wallace when talking about law and order. And the idea there is to capture voters that are concerned about law and order, full stop, that's it, and then others who have a broader fear of the cities and for whom law and order is a way to tap into that fear.
--Is fact checking more important than ever? On the one hand, there are more challenges, more spin, more that's not so that's said by politicians. So the fact checking and all of that is more important than ever. The question of whether it's more important gets into whether people are listening. Because there's a lot of fact checking that's been done that has not changed people's mind. There are even some studies that suggest the more they see contradictory information, the harder they cling to the initial untruth. So it's been never more necessary; whether it's beneficial and has the second part of it, which is, you hope help people make a more reasoned decision based on the facts, that we're not sure about.
Days until the 2016 election: 92.
DINING – A must have is the calamari at the Sea Chest on Moonstone Beach Drive in Cambria, California. This writer has enjoyed calamari from New York to San Francisco, from Boston to Boca Raton – the Sea Chest’s is the best.
SPORTS BLINK -- In long-awaited comments, Tom Brady speaks softly: Tom Brady speaks! Stop the presses. Freeze Twitter. Close the New York Stock Exchange for 10 minutes. Interrupt all Trump coverage. Brady ended his six-month silence Friday morning at Patriots practice when he took eight questions from the local football media for approximately five minutes. It was a shoutdown frenzy, and Tom found it easier to answer 'How much did you rely on your family to get through the whole ordeal?'' than 'Why did you drop the appeal when you did?
THE SWAMI’S WEEK TOP PICKS –
Major League Baseball Game of the Week: Saturday August 13, 8:05 p.m. ET, CSN: Detroit Tigers (61-50) vs. Texas Rangers (65-47). Detroit has been one of the hottest teams in baseball after the All-Star break. But they have difficulties always in Texas. Texas wins, 8 – 3.
Season to date (55 -39)
MARKET WEEK - Per a Rink Rats favorite BlackRock Chief Investment Strategist Richard Turnill: “Global stocks are up year-to-date, having shaken off worries about the strength of the global economy in the wake of the United Kingdom’s Brexit vote. Can they move higher into year-end? This week’s chart helps explain why further gains require a meaningful improvement in company earnings, particularly in developed markets.
The chart above shows how multiple expansion — or rising price-to-earnings ratios — has been the main driver of equity returns in many markets this year. This reflects a trend seen in recent years. Fundamentals remain lackluster for the most part, with second-quarter earnings growth in many regions flat to negative.
The worst of the U.S. profits recession does appear to be over. Second-quarter earnings growth for the S&P 500 likely will still show contraction from last year’s levels. Yet we find reasons to be marginally more optimistic about the second half. Sales growth has been better than expected, and is on track to turn positive for the first time since the fourth quarter of 2014. We also see the energy sector’s drag on earnings fading by year-end. The problem? High U.S. valuations and strong flows into U.S. equities already appear to reflect part of the good news. A U.S. market overweight has become a consensus trade, our analysis shows, raising the risk of sudden reversals.
In Europe, analysts have slashed their expectations for 2016 earnings growth since the beginning of the year on a collapse in expectations for the banking sector. Earnings are set to contract in seven out of 10 European sectors in the second quarter. The bright spot: global multinationals with geographically diverse sales, in sectors such as health care, materials and technology. In Japan, many companies are predicting a weaker yen in the second half, surveys show. This increases the risk of downward earnings revisions if the yen stays strong and hurts the overseas earnings of Japanese companies.
The main takeaway for investors: Be selective. We prefer quality companies that can increase earnings in a low-growth environment or grow their dividends. U.S. stocks with high dividend payouts, by contrast, look expensive and offer limited earnings potential at this time.” In other words, go global.
DRIVING THE WEEK - Donald Trump and Hillary Clinton are giving dueling economic speeches in Detroit. Trump goes first tomorrow, and Hillary goes Thursday.
Clinton campaigns in Florida on Monday and Tuesday ... Trump is in North Carolina on Tuesday ... Treasury Secretary Jack Lew is in Minneapolis on Monday "to meet with community and business leaders to discuss the state of the U.S. economy" ... Labor Market Conditions index at 10:00 a.m. Monday expected to rise to 1.5 from -1.9 ... JOLTS report Wednesday at 10:00 a.m. expected to show openings rise to 5,675K from 5,500K ... Retail Sales on Friday at 8:30 a.m. expected to rise 0.4 percent and 0.2 percent ex-autos ... Univ. of Michigan Sentiment at 10:00 a.m. Friday expected to dip to 91.5 from 92.0.
Next week: We are going dark for two weeks, time for a summer break. See you on August 29 with Higher Education, what next and our Football Season Swami picks.
Until Next Time, Adios.
August 8, 2016
CARTOON OF THE WEEK – Decision 2016
Monday, August 1, 2016
The dog days of summer are now officially here, August 1: baseball games seem longer this time of year; enough of Canadian football even though the Stampeders and the Argos are off to good starts; after these last two weeks of politicians and biased news networks, it is time for a break from politics (until Labor Day); two more weeks until prepping for the new academic year begins; so lets’ think about some good things for these dog days.
GREAT SUMMER SALAD - WATERMELON, FETA AND BLACK OLIVE SALAD
1 small red onion 4 limes 3¼ pounds watermelon (sweet and ripe)
8 ounces feta cheese 1 bunch fresh italian parsley 1 bunch fresh mint (chopped)
¼ cup extra virgin olive oil ⅔ cup pitted black olives black pepper
Peel and halve the red onion and cut into very fine half-moons and put in a small bowl to steep with the lime juice, to bring out the transparent pinkness in the onions and diminish their rasp. Two limes' worth should do it, but you can find the fruits disappointingly dried up and barren when you cut them in half, in which case add more.
Remove the rind and pips from the watermelon, and cut into approximately 4cm / 1½ inch triangular chunks. Cut the feta into similar sized pieces and put them both into a large, wide shallow bowl. Tear off sprigs of parsley so that it is used like a salad leaf, rather than a garnish, and add to the bowl along with the chopped mint.
Tip the now glowingly puce onions, along with their pink juices over the salad in the bowl, add the oil and olives, then using your hands toss the salad very gently so that the feta and melon don't lose their shape. Add a good grinding of black pepper and taste to see whether the dressing needs more lime.
A NICE SANGRIA –
1 (750-ml) bottle red wine
1/4 cup brandy
1/4 cup orange flavored liqueur (recommended: triple sec or Grand Marnier)
2 tablespoons fresh lime juice
2 tablespoons fresh orange juice 1/4 cup sugar 1/2 orange, thinly sliced
1/2 lemon, thinly sliced 1 unwaxed apple, cored, and cut into thin wedges
1 (750-ml) bottle sparkling water, chilled
Combine everything but the sparkling water in a large plastic container or glass pitchers. Cover and chill completely, 1 to 2 hours. When ready to serve, add the sparkling water.
GREAT SUMMER ENTERTAINING DISH - Fresh Corn Risotto with Wild Rice and Pancetta
This dish is perfect for entertaining. Get guests involved: One can stir the risotto while another tosses a salad. Don't rush risotto; it takes time and stirring.
2, 14 - ounce can reduced-sodium chicken broth 2 tablespoons butter
2 tablespoons olive oil 8 ounces pancetta, chopped
1 large onion, finely chopped (1 cup) 1 1/4 cups uncooked arborio rice
1 cup dry white wine or chicken broth 1/4-1/2 teaspoon crushed red pepper
1 1/2 cups fresh corn kernels or frozen whole kernel corn, thawed
1 cup cooked wild rice” 1/2 cup freshly grated Parmesan cheese (2 ounces)
2 tablespoons butter, cut into pieces 1/2 teaspoon ground black pepper
Shaved Parmesan cheese Snipped fresh flat-leaf Italian parsley
In a medium saucepan, bring broth to boiling. Reduce heat to low and cover to keep warm.
Meanwhile, in a large saucepan, heat the 2 tablespoons butter and the oil over medium-high heat. Add pancetta; cook and stir about 8 minutes or until nicely browned. Using a slotted spoon, remove pancetta and drain on paper towels, reserving drippings in pan. Reduce heat to medium. Add onion to reserved drippings; cook and stir until onion is tender.
Add rice to onion mixture in saucepan; cook and stir over medium heat about 3 minutes or until rice begins to brown. Stir in half of the cooked pancetta. Carefully add wine and crushed red pepper.
Slowly add 1 cup of the simmering broth to the rice mixture, stirring constantly. Continue to cook and stir over medium heat until liquid is absorbed. Add another 1/2 cup of the broth to the rice mixture, stirring constantly. Continue to cook and stir until the liquid is absorbed. Add remaining broth mixture, 1/2 cup at a time, cooking and stirring constantly just until rice is tender and the broth has been absorbed. (This should take about 20 minutes total.)
Stir in corn, cooked wild rice, the 1/2 cup cheese, the 2 tablespoons butter pieces and black pepper. Cook over low heat for 3 minutes, stirring occasionally.
Divide risotto among six shallow pasta dishes or bowls. Sprinkle risotto with the remaining cooked pancetta, shaved cheese and parsley.
Tip * To cook wild rice, rinse 1/2 cup wild rice, lifting the rice with your fingers to clean thoroughly; drain. In a small saucepan, combine wild rice and 1 cup water. Bring to boiling; reduce heat. Cover and simmer about 40 minutes, without stirring, or until rice is tender and most of the liquid is absorbed. If needed, drain. Makes about 1-1/4 cups.
WEEKEND GETAWAY – Holland, Michigan
In 1964, the city of Holland (30 miles southwest of Grand Rapids) purchased what turned out to be the best landmark this Michigan town of 33,000 could hope for: a Dutch windmill built in 1761. Today, visitors can watch it grind grain into flour at Windmill Island Gardens, a lush 36-acre patchwork of canals, dikes, wetlands and gardens. Nearby, re-created Dutch shops sell wooden shoes and delftware, as well as imported foods. Want even more European charm? Have lunch on a patio at Alpenrose Restaurant and Cafe, or stop by DeBoer’s Dutch Brothers Bakery, a family-owned business with 200 years of experience baking traditional crisp, buttery krakelingen cookies.
Later, take a tour of New Holland Brewing Company. Then for dinner, order a potato-bacon pizza and a pint of brown ale at the brewpub’s restaurant. The brewery stands just a block from the chic new City Flats Hotel, an ecofriendly boutique property with bamboo-fiber bed sheets and recycled-glass bathroom counters. Rooms from $149.
It’s worth getting up early to savor a quiet morning on the golden sand beach at Holland State Park, 8 miles west of downtown. You could spend the day here—changing in the park’s pavilion when the day warms up, snagging a hot dog at the concession stand, snapping photos of the picturesque lighthouse—or venture back into town. Pick up a bottle of wine at Butch’s wine shop or grab a bite to eat: sandwiches, soups and salads at lunchtime and a fine-dining menu in the evening. Be sure to save a few hours to shop. The Holland Peanut Store sells an array of candy and nuts; Tikal draws women with gauzy sundresses and chunky jewelry; and SandCastle for Kids offers a great selection of timeless toys. End your weekend getaway with dinner at the hotel’s CityVu Bistro, a rooftop restaurant serving flatbread pizzas, steak, seafood and pasta. Its floor-to-ceiling windows overlook the spinning blades of Holland’s iconic windmill.
For those on the east and west coasts, fly into Chicago, Holland is only a two hour drive from Chicago.
GREAT SUMMER READS – The Boston Girl
Anita Diamant’s novel following a women’s life through a period of dramatic change: Diamant creates a wonderful portrait of a woman who both expresses and helps create the definition of modern woman.
"Inside the Saga, Secrets and Sale of CAA,"
James Andrew Miller: For most of the past 40 years, Creative Artists Agency has been the most innovative, most influential and, yes, most feared talent agency in Hollywood. From its launch in 1975 by five young agents who broke from then-dominant William Morris, it ascended in the 1980s and '90s under Michael Ovitz, who perfected the packaging of clients - actors, writers, directors - into a single project and began representing nontraditional clients like Coca-Cola. ... But now that dominance is under attack. Employing his signature oral history style, James Andrew Miller (Live From New York, Those Guys Have All the Fun) charts CAA's past, present and future with exclusive access to all the players. Pre-order August 9. http://bit.ly/2aibdIb
"Employee #1: Apple"
Craig Cannon in The Macro: Bill Fernandez was the first employee at Apple after Steve Jobs, Steve Wozniak, and Mike Markkula incorporated it. He's currently working on his own startup, Omnibotics. http://bit.ly/2axoe0v
FUN READ -- "The Yunited States of Yuge," by Caity Weaver in GQ: "A journey through the very luxurious America that Trump already runs. Caity Weaver explores one part of this beautiful republic that Donald Trump has made great again: His portfolio of exclusive real estate properties." http://bit.ly/29VrTUN
GREAT SUMMER MOVIES – There are none.
BIRTHDAYS THIS WEEK – Birthday wishes and thoughts this week to Lynda Carter (65) Santa Barbara, CA.; Mark Cuban (58) Dallas, TX.; Bob Dole (93) Washington D.C.; Danny Glover (70) Del Mar, CA.; Dorothy Hamill (60) Palm Desert, CA.; Corlan Harrison … a nice person; Anita Hill (60) Norman, OK.; Don Imus (76) Westport, CT.; Justice Anthony M. Kennedy (80) Alexandria, VA.; Ted Lindsay (91) Bloomfield Hills, MI; Sandro Suffredini …famous soccer player.
OUT AND ABOUT - Grace Potter, St. Lawrence ’06 was one of the musical performers at the Democratic National Convention last week.
SPOTTED – Old friend Beth Elmore in town last week, always a pleasure to see the Trenton, Illinois native.
MORGAN STANLEY ON 2016 - Morgan Stanley analysts in a research report: "The US election is the latest political risk to markets, with the potential for serious fundamental consequences from campaign proposals. However, evidence points to a divided government & policy incrementalism, rather than sweeping near-term change ... Policy incrementalism, not transformation, is the most likely election outcome."
POLITICS 101 - Using a mix of polling data, 3rd party models, betting market probabilities, and academic studies, Politico developed and rank likely election outcomes based on 3 key principles: “1) Republicans should maintain House control; 2) The electoral map is not being remade, and favors Democrats; 3) Policy transformation is hard. Currently, Clinton White House outcomes are heavily favored."
WHAT WE LEARNED IN TRUMP'S CLEVELAND - Politics is full of compromises, and nominees like Mitt Romney, John McCain and George W. Bush also strayed from the traditional GOP agenda in various ways. But Trump has strayed in so many crucial ways - rejecting entitlement reforms, attacking the Iraq war, questioning America's commitment to protect NATO allies - that his nomination has raised questions about what the GOP agenda really is and what it will become.
The simmering tensions between conservatism and populism that boiled in Cleveland will complicate Trump's campaign for the White House, but they could also define the battle for the party's identity for decades to come.
THE CONVENTIONS - Clinton's Convention Is Made for TV. Trump's Was Made for Twitter: Hillary Clinton put on a better television show in Philadelphia than Donald J. Trump did in Cleveland. Expectations had it the other way around. Mr. Trump is the bona fide television sensation, a former maestro of a hit reality series, and he had promised to bring some 'showbiz' to the proceedings. Yet it's Mrs. Clinton who has had the celebrities and musical acts that 'Tonight Show' bookers' dreams are made of - Alicia Keys, Meryl Streep, Paul Simon, Elizabeth Banks, Lenny Kravitz and Lena Dunham. It's Mrs. Clinton who has had the more professionally produced show. It is Mrs. Clinton who has had the bigger ratings, by several million people.
WHAT TO DO WITH BILL - If Hillary Clinton wins the presidency, Bill Clinton will not become a regular at cabinet meetings, his wife's advisers say. He will not be invited into the Situation Room. He will step away from his family's foundation work and may not even have an office in the West Wing, given the undesirable optics of a former president and husband looking over the shoulder of the first female commander in chief. But the steps that Clinton aides are planning to shape his new life do little to address a potentially thornier problem: Historically, when Mr. Clinton does not have a job to do, he gets into trouble. ...Putting Mr. Clinton to good use, while containing his less helpful impulses, would be a major test for Mrs. Clinton as president, given the spotlight and pressure they would be under and her limited ability in the past to rein in his excesses.
Both conventions are over! Thank God. Now it's on to the debates which kick of Sept. 26th at Hofstra. 98 days until the election.
THE SWAMI’S WEEK TOP PICKS –
Major League Baseball Game of the Week: Saturday August 6, 7:05 p.m. ET, CSN: San Francisco Giants (61-44) vs. Washington Nationals (61-44), two first place teams face off, both currently struggling – Giants win 3 – 2.
Season to date (54 -39)
MARKET WEEK – Last week the first reading of U.S. second quarter GDP showed the economy grew at just 1.2%, well below market forecasts. The worse-than-expected report saw the U.S. dollar and yields close sharply lower on Friday. Equities staved off an early morning sell off to finish higher on the day and remained largely unchanged for the week.
After a busy week of earnings that saw Alphabet (GOOG), Amazon (AMZN), Apple (AAPL) and Facebook (FB) all report strong results, this coming week is a little quieter on the calendar. We will get earnings from the following:
Monday: Mitsubishi UFJ Bank
Tuesday: Aetna, AIG, Honda, Pfizer and Procter & Gamble
Wednesday: HSBC, Met Life, Rio Tinto, Standard Chartered and Tesla
Thursday: LinkedIn, Toyota and Viacom
Friday: Berkshire Hathaway, Royal Bank of Scotland and Virgin America
This coming week's U.S. economic data will be highlighted by Friday's employment report for July. After the impressive June report, Fed officials will be hoping the trend continues. The employment sector continues to be the highlight of the U.S. economy, and after GDP came in at a disappointing 1.2% growth, the employment sector is becoming more important for Fed officials. Current estimates are for and increase of 180,000 jobs in July. Estimates will be revisited after Wednesday's ADP employment report. ISM manufacturing data and weekly jobless claims data are due earlier in the week.
DRIVING THE WEEK - Welcome to August! What will polls fully conducted after the Democratic Convention show us about the state of the race? ... President Obama heads to Atlanta, Ga. On Monday to speak at the 95th National Convention of Disabled Veterans ... July jobs report on Friday expected to show a gain of 175K and unemployment dropping to 4.8 percent from 4.9 percent.
Next week: Higher Education, what next.
Until Next Time, Adios.
August 1, 2016
#VII-11-313CARTOON OF THE WEEK – Pokemon Go